I think I'm a part of the first generation of journalists to skip print media entirely, and I've learned a lot these last few years at Forbes. My work has appeared on TVOvermind, IGN, and most importantly, a segment on The Colbert Report at one point. Feel free to follow me on Twitter or on Facebook, write me on Facebook or just email at paultassi(at)gmail(dot)com. I'm also almost finished with my sci-fi novel series, The Earthborn Trilogy.

US Game Sales Down 25% from Last Year, but Why?

When people ask me why it is that I write about video games for Forbes, a business publication, I always point them to a series of statistics showing how the industry has grown by leaps and bounds over the past decade or more.

That said, it’s not always a lush green field of unparalleled expansion, which is true for most industries. It’s a bit worrisome that game sales of both hardware and software are down a full 25% from last year. Most of the drop is credited to a decrease in hardware sales.

“Hardware really slowed down this month and all systems saw a unit sales decline versus last March, and on an average sales per week basis, versus February 2012,” said NPD analyst Anita Frazier. “That said, the high definition console systems fared better than many other hardware platforms.”

That last line means “the PS3 and 360 aren’t doing great, but the Wii is worse.”

On the game side, though Mass Effect 3 has been a big sales hit, outpacing sales of the second game during the same time frame of release, the rest of the titles in the top ten aren’t exactly making the sales charts catch on fire.

Most notably, the latest Call of Duty has slowed way down recently, as that’s generally been a title that remains high on the charts for a good long while after release.

So what’s going on here? My simple analysis is that it’s time for a new console generation, something the industry seems to recognize. The Xbox was released in 2005, the Wii and PS3 in 2006. The simple truth is that many people who want to buy these systems probably already own them by now, and as such, the drop in sales is not able to be offset by newer handhelds like the Vita and 3DS.

The WiiU is going to be the first new console out, hopefully by Christmas this year. The next generations of Microsoft‘s Xbox and Sony‘s PS3 will almost assuredly be announced this year at E3, with a likely release in 2013.

In short, I’m not worried about the long term health of the industry. With few blockbuster games out and a console generation in its declining years, it’s not a huge mystery why sales are down.

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Besides hardware i think a lot has to do with the point you touched on how there just haven’t been any killer games. ME3 yes but between TOR and the backlash of the ending i just skipped buying it and i doubt i’m alone. The rest are just meh. Probably has a lot to do with the fact that every single one of those games is a sequel, remake, continuation of the series, etc. Not that there’s anything wrong with doing a good sequel but on the whole these are not very exciting ones and games whose previous sequels came out not that long ago for the most part. I feel they may be running into a similar problem as Hollywood to a small extent were people are getting tired of buying the same reheated things with a few tweaks.

I invest in the video game sector so many articles cross my desk including forbes. I guess I like to point out BS when I see it. I originally came to post my comment below. Why? Who the hell are you, comment police?

The industry is changing so quickly that software and hardware sales don’t give a complete picture anymore: there’s also DLC, full games downloaded online (through XBox Live, for example), and all the revenue from mobile / social media games. Companies are probably doing better than retail sales indicate, and the footholds they’re establishing in the digital world are probably worth the transitional setbacks. Market researchers just haven’t caught up with these new trends.

I agree about the need for new hardware. The other side of that coin is that the imminent release of new hardware will naturally slow sales of the old hardware, as consumers hold out for the next big thing.

Call of Duty also needs an overhaul. The latest game is more a remake than a sequel, and consumers will eventually stop paying $60 for the same game over and over again. Then again, how many people bought the latest DLC pack? I think it was $15: less than the retail price of the game, but considering the sales-to-retail price, the overall profits for the developer may be almost the same as selling the game a second time. Maybe it doesn’t need an overhaul after all.

NDP is no longer a accurate measure of the gaming industry. Quarter after quarter they report massive declines in the industry yet quarter after quarter the big game companies show increased revenue. They don’t take into account new revenue streams (social) or distribution models (digital) therefore they can not accurately measure the industry and their reports should be discounted.

My thoughts resonate with the other posters here, but there is a large reason that hasn’t been mentioned.

Game companies are too stuck on releasing big games during the holiday season. October to December 2011 is the worst I’ve seen. There were so many big games to choose from that many titles ended up getting passed over. People only have so much money to spread around. No matter how big all of the games are, you can only afford to get so many. Sure, everyone wants those big Christmas season sales, but if the market is saturated as it was, only the biggest games are going to sell.

If all of the big releases are done 3 months out of the year, you can easily see why total sales are down. Since the Christmas season, there have been no big releases besides Mass Effect 3. The only game that is guaranteed to be a best seller in the next few months is Diablo III. After that, there is nothing in the way of huge releases until the end of September.

This year is going to end up being just like 2011. Battle of the Sequels 2012. Borderlands 2, Assassin’s Creed 3, Halo 4, whatever the new COD rehash is going to be, and all of the big name releases that hasn’t been given a date yet but usually end up October – December. Not to mention the Wii U console release in November.

Who has money for all of this in that small span? No one. Companies complain about declining sales, but want to mash all of their big titles together in one part of the year, then complain we don’t buy all of them.

I am surprised you haven’t mentioned the utterly enormous continuing growth in low cost games sales for the iPhone, iPad and iPod touch eating into traditional high-priced games titles.

With high quality titles such as Infinity Blade, Real Racing, etc as well, as the more simple titles such as Angry Birds and the graphics horsepower of iOS devices, AirPlay mirroring and extended desktop to big screens, these portable games represent a far bigger threat than snake-playing mobiles of past decades ever have.

99c – $9.99 titles and the “always with you” nature of these devices combined with their accelerometer, gyroscope, digital compass and multi-touch enabled control options obviously trump physical buttons for more than enough users to make the iOS platform a clear and present danger to the traditional console and portable gaming worlds.

Pooh. So dedicated gamers who’ll pay 70$ for a new game and hundreds to thousands for a high end gaming station, are suddenly satisfied with a 4 inch screen and teeny characters. Ok, we’ll just agree to disagree on that one.